Types of Products that are Produced by BP Company - Assignment Example

Social Performance of British Petroleum Company (BP) Social Performance of British Petroleum Company (BP) Q1. The Structure, Nature and Types of Products that are produced by BP Company British Petroleum is a British Multinational gas and oil company that has its orgins in 1909 when the Burmah Oil Company set up the Anglo-Persian Oil company as a subsidiary to help it effectively exploit the Iranian oil discoveries. British Petroleum recently rebranded and changed its name to BP plc. It is considered to be the sixth-largest global energy company in respect to its market capitalization and is headquartered in London United Kingdom. The company currently has its operations running in over 80 countries across the world and is able to produce an average of about 3.3 million barrels of oil on a daily basis in addition to its having proven oil reserves estimated to stand at about 17 billion oil barrels. BP is also considered to be among the largest producers of global natural gas producers. Of note is that the production of natural gas by BP plc currently makes up for more than half of the company’s energy production. It is this aspect that has caused the company to become the largest natural gas suppliers and producers in the United States (British Petroleum, 2013). External environment factors that can affect the success of BP plc. There are a number of BP plc external environment factors that can be able to greatly affect the success of the company. These include factors such as Economic factors and social factors. Economic factors such as interest rates, inflation, economic growth, exchange rates and taxation changes can greatly affect the overall success of BP plc. High interest rates might potentially deter the company from investing in certain regions across the world because it generally costs more to borrow, factors such as inflation might result in the provocation of high wage demands by the company’s employees which will then result in increased cost of production, having a strong currency may potentially cause it to become more difficult for the company to export its produce as it might raise the price in terms of foreign currency. Social factors can also affect the success of BP. Changes in social trends can impact the demand of the company’s products as well as the willingness and availability of individuals to work for the company as employees (Abrams, 2013). Factors such as an increasing aging population can also force BP plc to recruit older employees whose rate of production might be relatively low. Q2. Salient Stakeholders of BP BP plc has a number of key stake holders that are found to be crucial in the company’s operations, some of these stake holders include the company employees, its shareholder and analysts as well as various governments and regulators. BP plc. Employees: BP has an estimated over 86,000 employees spread out across over 70 countries globally. These employees are essential as together, they help in maintaining and running all of the company’s operations (BP, 2013). BP plc. Shareholders and Analysts: BP plc has a large number of shareholders and analysts that it constantly engages with through its annual general meetings and other events. These shareholders and analysts control the company’s stock and earn dividends from the stock, as such; they are greatly affected by all of the company’s operations (BP, 2013). Governments and other Regulators: BP plc. is constantly engaged with local governments on many fronts. This ranges from conducting consultations on revenue transparency and environmental regulations to activities aimed at collaborating with the local community or undertaking entrepreneurial initiatives. Governments and other regulators are salient stakeholders as their policies and the amount of taxes they charge has a great impact on the company’s operations (BP, 2013). Q3. Five ways in which BP plc. primary stake holders can be able to influence the organization’s financial performance. BP plc’s primary shareholder can be able to influence the organization’s financial performance in a number of ways. Its shareholders own a piece of the company and hence, are able to vote on a number of major decisions that might impact the company’s financial performance. The shareholders also serve as a source of financial accountability that is seen to drive the organization’s leaders into making logical decisions. BP plc’s employees are also able to positively affect the organization’s financial performance in that by improving and increasing their productivity, they can aid in greatly boosting the organization’s general financial performance. Increased employee performance results in improved sales that increases an organization’s financial performance. BP plc’s employees can be able to negatively affect the company’s financial performance by reducing their productivity. A reduction in productivity will result in reduced sales and hence poorer financial performance on the part of the company. The government can affect BP plc’s financial performance as a result of its policies. If the government introduces policies that are designed to encourage foreign investment such as reduced taxes, BP plc’s financial performance will be greatly improved by these measures. If the government increases the taxes and tariffs it charges BP, the company’s financial performance will be negatively impacted as higher taxes and tariffs will naturally lead to increased cost of production and less competitive product prices (IMF, 2013). Q4. One Controversial corporate Social Responsibility concern associated with BP plc. One of the most controversial corporate social responsibility concern that is associated with BP plc is the deep water horizon oil spill. The oil spill which began on April 20th, 2010, in one of the company’s oil rigs located in the Gulf of Mexico is widely considered as having been the biggest oil spill in the petroleum industry’s history and it is estimated as having been about 8% to 31% larger in volume as compared to the previous largest oil spill in history. As a result of a gas release, explosion and subsequent sinking of the company’s Deepwater oil rig, there was a resultant oil spill that flowed from the sea-floor for a time period of 87 days until it was successfully capped on 15th July, 2010. During the 87 day oil spill, an estimated 4.9 million oil barrels are thought to have been spilled into the ocean. In an attempt to try and contain the massive oil spill a variety of different methods were seen to have been utilized including the use of floating booms, skimmer ships, corexit oil dispersants and controlled burns. Although the spill was finally capped, there was an extensive damage to the wildlife and marine habitats a factor that critically affected the region’s tourism and fishing industries. The initial explosion and fire at the oil rig which initially burned for about 36 hours before the oil rig finally sank resulted in the loss of eleven lives and numerous other injuries among the employees that were working at the oil rig (Corn, 2010). The record setting oil-spill resulted in numerous investigations that all attempted to try and establish the actual cause of the explosion with the U.S. government and White House forming commissions that blamed BP and some of its partners for having implemented cost cutting policies and decisions that could have caused the oil rig’s safety systems to fail. BP was eventually charged by the US Justice Department and it pleaded guilty to two misdemeanors, eleven counts of man slaughter as well as having committed a felony as it lied to the country’s congress. The Justice Department ruled that BP would be subjected to four years of close ethics and safety practices monitoring by the government as well as being temporarily banned from being given any new contracts by the government. It was also charged an estimated $4.525 billion in fines and other assorted payments. However, there are still a number of ongoing legal proceeding that are expected to conclude the eventual amount of fine that that company will have to pay (Corn, 2010). Q5. Outline of a Plan to form a Stakeholder coalition to force Bp to address the Deepwater Horizon Issue. As the leader of BP’s shareholder, I would setup a BP plc company stakeholders’ coalition to address the Deepwater Horizon oil spill. To identify the key member of the coalition group, I would set up a small team that would be tasked with the identification of the possible stakeholders that should be drafted into the coalition group. The members of the coalition group would be selected from so as to ensure that there is equal representation across the board. This would serve to ensure that the group receives views and recommendations from across the board. The groups would aid in helping me to accomplish my goal as it would be able to provide possible recommendations that would serve to help in redeeming the company’s image as well as create guidelines for preventing future oil spills at the company’s oil rigs. To help in fostering collaboration between groups that I will be targeted to join the coalition, I will undertake to ensure that every team member clearly understand their exact position and what exactly is required of them within the team. I will also set clear and concise team goals that will aid in keeping the group members individual efforts well aligned with the coalition’s eventual desired outcomes. Including the input of every person in the team in the making and implementation of most of the large decisions will also greatly boost my cohesion building efforts (Butterfield, 2013). The team members will also be required to provide regular status reports that will help in keeping everyone on the very same playbook as well as enable the various team members to effectively redirect their efforts as needed. Q6. Possible challenges that I might face in encouraging the team members to form a coalition and some of the measures that I would undertake to overcome these challenges. There are a number of possible challenges that I might potentially face in forming an effective collaboration between the different groups. Some of these challenges include that there might be uncertainty as to the potential benefits of our different groups working together as each group might already have a strategy in place to help in achieving the proposed group objectives. Another key challenge that I might face is the fact that the different groups might have divergent views as to how the coalition objectives should be tackled, this might cause them to try and solve the issue in their own individual ways. Some of the groups might also happen to be of the perception that they are best suited to address the coalition objectives as it is part of their work mandate. As such, might not want to work as part of the coalition. To address these challenges, I would develop a report that would clearly highlight the benefits of forming the coalition. I would make it clear to all the coalition members that the best possible way of tackling the issue was by receiving input and working together as a single unit. I would also encourage the different coalition group members to give their input regardless of just how wild these may be (Butterfield, 2013). By modifying and refining these ideas, it will be possible to eventually attain the coalition group’s objectives. To help in encouraging groups that might feel that their work mandate is being interfered with by the formation of the coalition, I would setup the coalition such that this group would be tasked with heading most of the vital coalition functions. References Abrams M. R. (2003). The successful business plan: secrets & strategies. Palo Alto, Calif. The Planning Shop. BP. 2013. Our Stakeholder. Retrieved on 27 Jan, 2014 from http://www.bp.com/en/global/corporate/sustainability/bp-and-sustainability/our -stakeholders.html British Petroleum. 2013. BP at a glance. Retrieved on 27 Jan, 2014 from http://www.bp.com/en/global/corporate/about-bp/bp-at-a-glance.html Butterfield, J. (2013). Problem solving and decision making. Mason, Ohio : South-Western ; Andover : Cengage Learning [distributor]. Corn, M. L. (2010). Deepwater Horizon Oil Spill: Coastal Wetland and Wildlife Impacts and Response. DIANE Publishing. IMF. (2013). Finance & development. March 2013, The Middle East, focus on the future. Washington, D.C. : International Monetary Fund. Read More